Good Intentions

The 81st session of the Texas legislature is coming to a close and the last few weeks are always hectic for our elected representatives. The last day of the 140 day regular session is June 1st. Over 7,400 bills have been filed this session (4,800 bills in the House and 2,600 in the Senate) which is a 25% increase over the 2007 legislative session. As of May 8th with 23 days left in the session, only 96 have passed both bodies and 10 have been signed by the Governor into law. In 2007, approximately 24% were finally signed into law so things will be busy.

Since the session began, we have highlighted bills of interest to property owners associations (POAs) in eNews Monthly. The April issue provided a short summary of those bills. The Texas Legislative Action Committee of the Community Associations Institute has been working with bill authors to minimize or eliminate the negative impacts of some of the bills on community associations. Click here for a recent summary of the bills of concern to TLAC.

The bills of concern are filled with good intentions by the bills authors. The problem, many times, is that the author doesn't quite understand what a community association really is or how it operates. They propose laws that make it look more like a large governmental body when it is really more like a very small corporation. The solution to isolated problems is proposed like government regulations over major industries. Here are few examples of good intentions from the current session that won't work well for community associations.

• HB-372 would make POAs subject to open meetings and open records laws. This sure sounds reasonable until you understand these laws which apply to governmental agencies. POAs would be required to follow detailed rules relating to meeting notices, topics which can be discussed at meetings, production of records, and penalties for non-compliance. For these small, private corporations with volunteer board members, the open meetings requirements would be burdensome. Self-managed associations would need to hire experts (management companies or attorneys) to ensure they stay in compliance. The limitations on what can be discussed at a meeting would hinder a POAs ability to quickly respond to community issues. If there is a concern about owners not knowing about board meetings, a much more concise section could be added to the Texas Property code that applies only to POAs. And there are already laws covering POAs which deal with owner access to records that seem to work very well.
• SB-237 deals with POA elections. First, it does not allow a POA to place criteria on who may run for election with one curious exception. It requires the POA to order a criminal background check of all candidates and disqualifies a candidate for only one type of conviction. Although most POAs allow anyone to run for a board election, this would eliminate the ability of nominating committees in large communities to consider candidates and recommend a slate. Second, it requires a POA to establish a manned polling place open from 7 a.m. until 7 p.m. on the day of the election. With all of the voting options available to owners, manning a polling place for 12 hours seems overkill. For communities without a clubhouse, this may mean having to rent a facility for 12 hours. Third, if less than 30 days notice is given for the meeting or if a small number of owners request it, the POA must retain a neutral 3rd part to tabulate the vote. Since many Bylaws require a 10 to 30 day notice, those communities would always need 3rd party vote tabulators.
• HB-3946 would create a new state office of Property Owners Association Ombudsman "to provide a simple, affordable, and neutral forum for the resolution of disputes between homeowners and POAs". The Better Business Bureau and dispute resolution centers around the state already provide free or low cost mediation services. The Texas Property Code already requires that POAs give owners the right to a hearing in front of the board for any dispute.
• SB-241 would prohibit non-judicial foreclosures. Some POAs have provisions that allow them to foreclose on a property like a mortgage company. That is, sending and publicly posting required notices and then simply conducting the auction on the courthouse steps on the 1st Tuesday of the month. Judicial foreclosure requires the POA to file a civil lawsuit, go before a judge, obtain a judgment with the power of sale and then have the Constable conduct the sale. C.I.A. Services almost always recommends taking the judicial route even though it is slower and more expensive because it provides more opportunity to work something out with the owner. However, for some associations, especially those with high monthly assessments, the non-judicial approach results in quicker action with less legal fees which actually makes it easier to work out a settlement with the owner (since much less is owed).

Texas has a great website for viewed proposed legislation and tracking its progress during the session. Visit http://www.legis.state.tx.us/. The site has easy to understand descriptions of the legislative process and provides information about your own elected officials. You can look up any of these bills by typing in the bill number.

Pool Safety Compliance

In December 2007, the federal Virginia Graeme Baker Pool and Spa Safety Act was passed. It became effective one year later in December 2008. Since most community pools are only open during the summer season, 2009 is the first year under this new federal requirement. The law requires all pools to have anti-entrapment devices.

Virginia Graeme Baker was a 7-year old child who died in 2002 from being trapped in the filtration system of a hot tub during a school graduation party. She was the granddaughter of former U.S. Secretary of State James Baker. She was a member of a swim team and had been swimming since she was three years old so she did not drown because she was unable to swim. She became trapped on the suction drain at the bottom of the hot tub. Her mother jumped into the pool but was not able to pull her loose from the strong suction - it was later estimated at a force equal to 700 pounds holding her down.

Texas has had anti-entrapment laws on the books for years but the federal law differs sufficiently such that many pools must have their drain covers revised. There are several options for preventing entrapment to keep pools safe. The simplest is too have dual, interconnected drains of a prescribed size and separation. This prevents a body from covering the full drain opening which creates the suction. Alternatively under the new law, a vacuum relief system or other mechanism may be installed which limits the suction that can occur at the drain.

Each community pool should have already been examined by your pool contractor for compliance with the law and made any required changes. To read the full text of the law, click here.

Community Manager Meetings

Twice a year, all of the C.I.A. Services community managers gather in one location for a day of work, training and camaraderie. Our last meeting was on May 1st and everyone traveling to our new Bandera Office. We also held a short company stockholders meeting so they could see the new facility and meet the Bandera staff. As you can see from the photo, later that night, we had a fun Texas Hill Country BBQ with managers, stockholders and family members.

A typical community manager meeting agenda includes company updates, community highlights from each manger, refresher training on various topics, guest speakers or special topics, voting for Community of the Month, and the infamous community manager quiz.

At this month's meeting, the refresher training was on tips for presenting financial reports. We worked on preparation in advance of creating the board package, anticipating board questions, highlighting the number of interest, conveying context with the numbers and delivering a concise report. Gina Victor, Leslie Baldwin and Shelly Brady did a great job using those tips to give a sample report.

The special topic was a case study on a self-managed community with major problems within the community. The community has had bitter infighting that has divided the community. Elections have been disputed, temporary restraining order have been filed to stop elections, lawsuits have been filed against former board members, current board members have resigned, deed restriction enforcement (or lack of enforcement depending on which side you are on) has created personal antagonism and the association is out of money. Ralph Troiano reviewed the cast of characters and the sequence of events of the last several years. The managers identified each of the critical decisions and actions that led to the current situation and what alternatives could have averted the problems. They also suggested numerous steps that can be taken now to resolve the issues and begin healing their rifts.

Each meeting has a community manager quiz by President Ralph Troiano that is "feared" and fun. The best questions are always those where you really have to think about all aspects in case it is a trick question. A favorite example is "In a community with 5 board members, what are the minimum number of affirmative votes in order for a board action to pass?" Sounds simple but think about it - the answer is at the end.

This meeting's quiz was in the form of C.I.A. Services Jeopardy! (but you didn't have to answer in the form of a question). Four teams got to answer $5, $10, $15 and $20 questions in the categories of Meetings, Financials, Deed Restrictions, Maintenance and The Law. After two Double Jeopardy questions, the teams led by Nellie Martinez and Mary Jane Canavan were tied with the highest scores. Gina Victor's team didn't win but was most aggressive team selecting only the $20 questions. Anna Marron's team was just a couple answers away from winning it all.

Upcoming Seminars

The C.I.A. Services Seminar Series has two great seminars in May and June. This is our 6th year of presenting educational seminars for our board members and other community volunteers. Each seminar concentrates on the practical aspects of the topic and provides board members with background knowledge to help them in their decision making. We consistently receive positive feedback on the content and presentation. To view the seminar descriptions and full schedule, click here or visit the Library page of our website.

Each seminar begins at 6:00 p.m. and runs 2 hours. We provide deli sandwiches so you won't have to rush to eat dinner beforehand.  You'll leave with knowledge you can use immediately and a great notebook with the seminar slides, samples and reference materials for your future reference and to share with others.

Essentials of Architectural Control   new in 2009 Your governing documents provide authority to regulate design and appearance of any construction, improvements or alterations within the community. This is a powerful authority with an obligation that it be used sensibly. This seminar will explain the range and limits of this authority, demonstrate the role of architectural guidelines, describe the interplay between deed restrictions issues and ACC issues, and touch on handling the tough ACC problems. May 13, 2009 (Wednesday), 6:00 p.m. — Southwest Office May 19, 2009 (Tuesday), 6:00 p.m. — North Office

Advanced Topics for Board Members After you've been on the Board a few months or a few years, you realize that some things are pretty complicated. This seminar has a heavy legal and legislative orientation. We'll dissect the lawsuit process, review foreclosures and bankruptcies, and discuss significant portions of the Texas Property Code and federal law. After all the legal stuff, we'll touch on aspects of “risk management” which includes insurance, reserves and budgeting concepts. June 4, 2009 (Thursday), 6:00 p.m. — Southwest Office June 23, 2009 (Tuesday), 6:00 p.m. — North Office

You can register at any time by calling 713-981-9000 or emailing seminars@ciaservices.com.

Community of the Month

We are proud of every one of our communities so it is always hard to find just one to highlight. We start by having each of our Community Managers write a nomination for one of their communities. We then read them and take a vote. Here are our most recent selections:

• May - Heather Ridge Homeowners Association
  North Office - Kim Easterling, Community Manager
• April - Heron Nest Owners Association
  North Office - Annette Escarenio, Community Manager
• March - Hunters Green Homeowners Association
  Southwest - Gina Victor, Community Manager

To see the full story on these communities and to see the past winners, visit the Community of the Month page on our web site.

Anniversaries

Every month we appreciate the communities that are celebrating their anniversaries with us. Here are the clients that started with us in May.

• Sterling Green Village Community Improvement Association — 23 years
• Sugarwood Community Association — 16 years
• Bay Pointe Community Association — 10 years
• Crystal Lake Property Owners Association — 9 years
• Eagle Springs Community Association — 8 years
• Cinco Ranch Residential Association II — 1 year
• Cinco Ranch Commercial Association II — 1 year
• Cinco Ranch Southwest Community Council — 1 year

Our goal has always been to create a positive, long term relationship with all of our client communities. We are very proud to be managing all of these communities.

Employee Spotlight

• Congratulations to Renea Miksch, an Executive Vice President, stockholder and community manager at our North Office, on her 24th anniversary with C.I.A. Services.
• Congratulations to Laura Tate, a Vice President, stockholder and community manager at our North Office, on her 16th anniversary with C.I.A. Services.
• Congratulations to Margie de la Cruz, a stockholder at our Southwest Office, on her 9th anniversary with C.I.A. Services.
• Congratulations to Margaret Eckhardt, a new stockholder and community manager at our Southwest Office, on her 5th anniversary with C.I.A. Services.
• Congratulations to four of our Noth Office managers, Anna Marron, Brenda Ellington, Mary Jane Canavan and Annette Escarenio for successfully passing the M100 exam. M100 is a course on "The Essentials of Community Association Management" presented by the Community Associations Institute. It is one of the steps towards earning the Professional Community Association Manager (PCAM) designation.

Renea Miksch		Laura Tate

Margie de la Cruz		Margaret Eckhardt

Anna Marron		Brenda Ellington

Mary Jane Canavan		Annette Escarenio